Wednesday, 27 August 2008

If you have ever tried to find a copy of an arbitrator's opinions, you may have felt frustrated. At Publication and Confidentiality of Labor and Employment Arbitration Awards, the Alaska Employment Law Blog has a wonderful overview of how such awards get published (and don't) and where you can look to find them. The author, Robert W. Landau, is a full time labor arbitrator.

One hint on why they may not be available -- according to the code of arbitrator ethics, all aspects of the arbitration process, including the award, must be treated confidentially absent consent of the parties.

Monday, 18 August 2008

Not in her role as attorney, but in her role as terminated prosecutor. Barbara Corey, former prosecutor for Pierce County (Tacoma, Washington) was third in command in the prosecutor's office when she was fired in 2004. The firing occurred after she initiated the transfer of another employee, an act which according to the defense, angered other employees. A part of her claim related to post-termination publicity about her firing, with Corey claiming that she had been defamed. According to the story in The News Tribune, County hit with big jury award, the jury award was just over $3 million:

• $1.5 million for the damage to her reputation• $750,000 for non-economic damages• $700,176 for economic damages related to the defamation and false light claims• $124,994 for loss of wages because of her wrongful termination

Although. as always it's dangerous to read too much from a short story, a couple of danger points stick out:

in closing arguments both sides were accusing the other of being liars, with the County arguing that she told a "bundle of lies" before her termination. If the jury doesn't buy that argument, then it sometimes heaps fuel on the fire of their indignation.

the County argued it was also within its rights to fire her because she was an "at will employee." While that statement is no doubt true, it rarely works as a good jury argument. Right or wrong, the reality in an employment law trial is that the the burden is on the employer to justify their action. Rare is the employment law case that will be won by the defense if the jury believes that the employer did not have a good reason for taking the action that it did. Legally, the employee is at will, and before and after the jury verdict that is a very important point, but in front of a jury, it's rarely a winner.

I worry that there has been too little discussion about EFCA's true ramifications, and I think much of the congressional support is based on a desire to give our friends among union leaders what they want. But part of being a good steward of democracy means telling our friends 'no' when they press for a course that in the long run may weaken labor and disrupt a tried and trusted method for conducting honest elections.

And as I, and a large number of commentators have been saying, one of the other provisions of the EFCA which would dramatically change the leverage on first contract bargaining, may do even more to upset the current balance of power between labor and business. Both provisions, replacing secret elections with card check and requiring binding interest arbitration if a first contract is not reached after 90 days of bargaining, are radical changes. Even if you think that they are needed, it should be a conscious decision, not just a political favor.

One of my greatest concerns about Congressional action is that as an institution it seems far out of touch with the realities of the workplace. And since it doesn't involve a tax increase, enacting employment and labor matters could be seen as a "free" way to pass on benefits to constituents. However, once enacted, employee rights will not be removed. (The last example I can think of is the Portal to Portal Pay Act of 1947). And if ill conceived legislation, truly disrupts the workplace, the cost is one that we will all bear. The EFCA is one piece of legislation that has that potential.

No manufacturer, private labeler, distributor, or retailer, may discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment because the employee, whether at the employee's initiative or in the ordinary course of the employee's duties (or any person acting pursuant to a request of the employee)—

‘‘(1) provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of any provision of this Act or any other Act enforced by the Commission, or any order, rule, regulation, standard, or ban under any such Acts.

Monday, 11 August 2008

I am catching up on some past articles that came in while I have been out of the office and one that caught my eye was the NYT's article from last week, Muslim Holiday at Tyson Plant Creates Furor. At a Shelbyville, Tennessee Tyson plant, the Retail, Wholesale and Department Store Union negotiated a contract which traded the Muslim holiday that is the last day of Ramadan, Id al-Fitrfor Labor Day.

Although it is quite popular with the 100's of Somali workers at the plant, it is has been less so with others who see it as un-American. It might seem a little less so when you factor in that traditionally the employer had required employees to work on Labor Day, so what they really received was premium pay rather than a day off. As one of the members of the union's negotiating team said, "We had worked 23 Labor Days in a row; it wasn’t like it was a day to spend with our family."

As the beleaguered union president Stuart Appelbaumsaid, “What we negotiated was the will of the workers,” and added that his was the first union to negotiate a paid day off for a Muslim holiday and that he was sure Tyson would not be the last employer to agree. Perhaps as interesting, Mr. Appelbaum is also the President of the Jewish Labor Committee.

It is a new world.

Hat tip to the folks at the Cornell University's Catherwood Library's Workplace Issues Today which provides "abstracts and links to workplace-related news stories covered in the major media."

USERRA cases are relatively rare still (probably not for long) so unusual to see two cases from different circuits on consecutive days. Both are on procedural grounds and in both cases, notwithstanding that USERRA would seem to be the quintessential federal question case, plaintiffs lost out on a federal court hearing

The 5th and 6th are the only two circuit courts to address the issue. While district courts have been mixed, the 6th Circuit specifically disagreed with district courts from Georgia and Kansas which had held otherwise.

In McIntosh v. Partridge(5th Cir. 8/8/08) [pdf] decided last Friday, the Court held that where a state is the employer, a federal court has no jurisdiction under USERRA when the claim is brought by the employee. According to the statute there are three situations that can arise with differing jurisdictional results:

(1) In the case of an action against a State (as an employer) or a private employer commenced by the United States, the district courts of the United States shall have jurisdiction over the action.(2) In the case of an action against a State (as an employer) by a person, the action may be brought in a State court of competent jurisdiction in accordance with the laws of the State.(3) In the case of an action against a private employer by a person, the district courts of the United States shall have jurisdiction of the action.38 U.S.C. § 4323(b).

McIntosh was employed by the state of Texas. Notwithstanding that the prior version of USERRA gave federal courts jurisdiction under such circumstances and the statute uses "may" rather "shall" in the applicable section, the Court held that federal courts have no jurisdiction for USERRA claims against a state employer.

Actually, it is not accurate to imply that estoppel has not previously been applied to ERISA issues, see 5th Circuit Adopts ERISAEstoppel, But Employee Still Loses. But the 3rd Circuit's decision last week in Pell v. DuPont (3rd Cir. 8/8/08) makes the point of how important it is for employers to be accurate in all of their communications to employees, particularly about retirement benefits. Given the number of times estoppel has been applied in other contexts just in the past year, see my prior posts here, here and here, Pell highlights yet another area of exposure for employers that seems to be increasing.

The the issue in Pell arose because of his transfer from a wholly owned subsidiary to the parent company. Most of the communications he received about the effective date of employment to be used in his retirement had the wrong service date, but also contained the usual disclaimers that they were estimates and subject to further review. The error that was contained in the prior communications was discovered before Pell made his final decision to retire, although it was within six months or so of his contemplated retirement.

Under all the circumstances the district court held that DuPont was estopped from using the effective employment date as calculated under the plans, and must use the earlier employment date that it had communicated to him. The court used a date that had been contained in a letter to Pell from DuPont's Director of Employee Compensation and Benefits at Consol, the subsidiary where he was originally employed. That letter referred to his “Retirement Plan Credited Service Date” as being August 1, 1972.

When Pell actually retired, the correct calculation under the plan resulted in a pension service date of November 1, 1975 which is what DuPont used. The district court entered an injunction that the service date to be used was August 1, 1972 and DuPont was estopped to use the "correct date" as determined by following the terms of the plan. However, the district court also held that it was prospective only, holding it did not have the power to award the past underpayments.

The appellate court, went further than the district court, adjusting the date to February 10, 1971 and requiring that restitution be made, not just a change in prospective payments.

Key to its holding was a 1991 email (more than 10 years before Pell's actual retirement) from an employee in the benefits department:

“Consol [the subsidiary] pension will be calculated on their formula and their SS offset. Your adjusted service date is 2/10/71 not 1975 and Du Pont will use this date for your years of service under their formula when calculating your pension. The‘Pension’ booklet in your green Benefits Binder explains the Du Pont formulas; however, nothing written re offsets as each would be different.”

It has to be scary for a benefits worker to think as they answer the frequent requests for clarification and information, that their one response (perhaps one of hundreds written in that week) could be "rewriting" the pension scheme at least for that one employee.

Although as the opinion makes clear, there are a number of hurdles that Pell had to overcome to establish equitable estoppel, this was a time where it happened.

No one can or should argue that it is not important to convey accurate information to employees on which they are basing major decisions. But anyone who has ever dealt with the complexity of most pension schemes, know how easily it can be to unwittingly trip up.